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WASHINGTON (Reuters) - U.S. underlying consumer prices picked up in January, while the number of Americans filing claims for unemployment benefits rose slightly last week, suggesting the economy was stable enough for the Federal Reserve to keep interest rates on hold this year.
The reports from the Labor Department on Thursday followed on the heels of Fed Chair Jerome Powell’s remarks to lawmakers this week that the “economy is in a very good place, performing well.” Powell added that “over the next few months, we expect inflation to move closer to 2%, as unusually low readings from early 2019 drop out of the 12-month calculation.”
The U.S. central bank last month left interest rates steady. It is widely expected to keep monetary policy on hold this year after it reduced borrowing costs three times in 2019.
“There is not no inflation out there and with unemployment claims remaining at low full-employment levels, inflation pressures will continue to build,” said Chris Rupkey, chief economist at MUFG in New York.
The consumer price index excluding the volatile food and energy components rose 0.2% in January as Americans paid more for accommodation and apparel, after edging up 0.1% in December.
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